Question

Purity Ltd. is a rice producing company. Everyday 5,000 bags of rice, each weighing 10 kg, are produced here. In comparison to the previous year this year there has been less number of bags produced on a per day basis. The number is around 4,500 which is less than the standard target of 5,000 set by the company. The company however, has been able to reduce the costs involved in comparison to last year’s spending on the production and packaging of each bag. The quality of bags has also been up to the mark. Identify the concept of management overlooked here.

Answer 1

The company is trying to achieve efficiency... Efficiency means the task correctly done with minimum cost

Answer 2

The concept of Management which was overlooked by the company is Efficiency.

Explanation:

• In the given case,it has been stated that the company,Purity Ltd.,had set the Standard target of production during the year as 5,000 bags of rice.However,the company was only able to produce 4500 bags and thus failed to achieve its budgeted target of 5,000 bags of rice.

• The reasons for such failure is lack of Efficiency in production during the year within the company which lead to less production throughout the year.The following can be the reasons for decrease in Efficiency of the production department of the company:

1. Internal disputes between different departments such as disputes between Production department and Cost department.
2. Labour Strikes.
3. Low demand from market
4. No supply of Raw materials from supplier
5. Abnormal Idle Time due to machine breakage,long waiting hours for workers,inefficient job distribution among the labours.

• However,despite all this,the company was able to decrease its cost of packaging and production of each bag due to its better Quality Control management team which led to production of high quality products.